PLAN DETAILS FOR THE PERSONAL MENU PLAN December 2016 Protection Personal Menu
WE GIVE THIS BOOKLET TO EVERYONE WHO BUYS A PERSONAL MENU PLAN. IT CONTAINS THE PLAN S TERMS AND CONDITIONS AND TELLS YOU HOW YOUR PLAN WORKS. IT ALSO EXPLAINS HOW TO MAKE A CLAIM, KEEP YOUR PREMIUMS UP-TO-DATE AND HOW TO MAKE CHANGES. These terms and conditions are part of the contract between the plan owner and Royal London so please keep them in a safe place, as you may need them in the future. The contract between you and Royal London consists of your application to us, these terms and conditions, the cover summary for each cover that you buy and any endorsements to these terms and conditions that we give you. Where there s a conflict between the terms and conditions and the cover summary, the terms set out in the cover summary will apply. Cancelling your plan If, after taking out the plan, you feel it isn t suitable, you may cancel it by writing to us at the address shown on page 4. If you do this within 30 days of it starting, we ll return any premiums you ve paid. If you cancel after the first 30 days, we won t refund any of the premiums. If you would like this booklet or any other information in large print, in braille or on audio CD, please call 0345 6094 500. Before you start, please note: Any words in bold are defined in section 7. Page 2 of 56
WHAT S INSIDE SECTION 1: 5 The covers in the plan 5 Summary of the main covers SECTION 2: 6 How your plan works 6 How to make a claim 7 What happens when you make a claim 7 Who we ll pay 7 When we will and won t pay a claim 8 Connected claims 12 How much we ll pay 16 Getting a lump sum instead of regular payments SECTION 3: 19 Your premiums 19 More about premium types and frequency 19 What happens if you don't pay a premium 19 What to do if we cancel your plan 19 When and how your premiums could change 20 Reviewable premiums SECTION 5: 26 Claims definitions 27 Additional Conditions 29 Critical Illness definitions 41 Incapacitated 43 Terminal Illness 43 Unemployed SECTION 6: 45 General terms and conditions 45 Source of covers 45 Membership of Royal London 45 Cancelling your plan 46 How we use your personal information and verify your identity 48 When we may change the terms and conditions applying to your plan or cancel your plan 49 Change of occupation 49 Complaints 50 If we can't meet our liabilities 50 Law SECTION 7: 51 Definitions of the words we use SECTION 4: 21 Changing your plan 21 Increasing cover 21 Cover Increase Options 23 Renewable option 23 Joint Life Separation - splitting your plan 24 Joint Life Reinstatement 24 Lifestyle review 25 Changing your plan in other ways Page 3 of 56
TELLING US ABOUT CHANGES Changes before your plan starts You must tell us if there s a change to anything in your application after you ve applied for your plan, but before the date we assume risk. These changes could be affecting you or the person covered. For example, a change to health, occupation or leisure activities. If you don t let us know about any changes we might not pay out. Or, we might change the terms of your plan or cancel it. We ll give you a copy of your application form, and any other information we ve been given, if you ask us. It will help if you have your plan number to hand when you contact us. Changes at any time At any time, please remember to tell us if: you or the person covered stop being resident in the UK, Jersey, Guernsey or the Isle of Man you or the person covered change your name you change your address you change your bank account You can contact us in the following ways: 0345 6094 500 protectionhelp@royallondon.com 0345 6094 522 Royal London, 1 Thistle Street, Edinburgh EH2 1DG royallondon.com If you phone us, we might record or monitor your call so we have an accurate record of anything you tell us. Page 4 of 56
1. SUMMARY OF THE MAIN COVERS You choose which covers to have in your plan, depending on what you need. Income Protection This pays you an income if the person covered can t work because of an illness or injury and they meet our definition of incapacitated. Unemployment Cover This pays you an income if the person covered is made redundant or unemployed through no fault of their own, or if they have to give up work to become a carer for a relative full-time. Life Cover This pays out if the person covered either dies or is diagnosed with a terminal illness that meets our definition. Critical Illness Cover This pays out if the person covered is diagnosed with a critical illness we cover that meets our definition, or if they meet our definition of total permanent disability. Life or Critical Illness Cover This pays out if the person covered either dies or is diagnosed with a terminal illness or critical illness we cover that meets our definition, or if they meet our definition of total permanent disability. Waiver of Premium (Sickness) This pays your plan premiums if the person covered can t work or carry out a number of living tasks because of an illness or injury and they meet our definition of incapacitated. Waiver of Premium (Unemployment) This pays your plan premiums if the person covered is made redundant or unemployed, or they give up work to become a carer for a relative full-time. You ll find claim definitions for these covers in section 5. Page 5 of 56
2. HOW YOUR PLAN WORKS Paying claims How to make a claim If you or your representatives want to make a claim, please call us on 0345 609 4500. Before you call, please read through the information below. Please contact us as soon as possible, so we can help you as quickly as we can. It will help us if you have your plan number to hand when you contact us. If you re living or working outside the UK and want to make a claim, we might need you to return to one of the countries listed opposite. This doesn t apply to claims for Life Cover or Unemployment Cover. The UK Australia Austria Belgium Bulgaria Canada Channel Islands Cyprus Czech Republic Denmark Estonia Finland France Germany Gibraltar Greece Hong Kong Hungary Iceland Ireland Isle of Man Italy Japan Latvia Liechtenstein Lithuania Luxembourg Malta The Netherlands New Zealand Norway Poland Portugal Slovakia Slovenia South Africa Spain Sweden Switzerland USA For Unemployment Cover claims you must be resident in the UK, Jersey, Guernsey or the Isle of Man. Page 6 of 56
What happens when you make a claim We ll send you a claim form please fill it in and send it back to us. Depending on what your claim is for, we ll also ask for other information. For example: a birth, marriage or death certificate medical information, or medical records proof that your income has changed paperwork about your mortgage proof that your name has changed We ll pay the reasonable cost of all medical reports or evidence we ask for. Who we ll pay We ll pay the cover amount to the person who is legally entitled to receive it. This will depend on your claim, your circumstances at the time, and whether the plan has been assigned or put under trust. We usually pay the plan owner or, if they ve died, their personal representatives. If a personal representative wants to claim, they must send us an original Grant of Representation or Confirmation. If there are two plan owners we ll pay them jointly. If one of them has died, we ll pay the survivor of them. If the plan has been assigned, we ll pay the assignee. If an assignee wants to claim, they must send us the original Deed of Assignment. If the plan is under trust, we ll pay the trustees. The trustees must then follow the terms of the trust to distribute the money to the chosen beneficiaries. If trustees want to claim, they must send us the original Trust Deed, and any original deeds altering the trust. We won't be responsible for checking that the trust has been properly established or terminated. When we will and won t pay a claim If the information you send is correct and complete, and your claim is valid according to these terms and conditions, we ll pay your claim. If you don t send us everything we ask for, or if the information you provide is incorrect or incomplete, we might not be able to pay your claim. If we ve already started paying it, we might stop until correct and complete information has been provided. We might also stop or not pay your claim if: you or the person covered didn t answer the questions on your application fully, honestly and to the best of your or their knowledge you didn t tell us about a change in circumstances between when you originally submitted your application and the date we assumed risk. This includes information about the person covered's health, occupation or leisure activities Rules that apply to all types of cover We ll pay a claim for a cover if: the cover is shown on your cover summary the claim is made during the term of that cover any deferred period shown on your cover summary has passed We won t pay a claim if: it s the result of an exclusion shown on your cover summary it s the result of intentional self-inflicted injury, unless it s a claim for unemployment or death more than 12 months after the cover starting or restarting. Page 7 of 56
Claims for incapacity This applies if you have Income Protection or Waiver of Premium (Sickness). When we ll pay We ll pay a claim if the person covered meets our definition of incapacitated for a continuous period longer than the deferred period shown on your cover summary. You ll find the definition of incapacitated in section 5. We ll continue paying until: the person covered no longer meets the definition of incapacitated the person covered goes back to work the cover payment period ends if one s shown in the additional features of your cover summary the cover ends, or the person covered dies To confirm that the person covered meets our definition, we might: ask the person covered to be examined by a doctor or health specialist we choose ask for any other evidence we may reasonably require. When we won t pay If we don t get the information that we ask for (for example, medical information), we might not pay your claim. If there s more than one person covered for Waiver of Premium (Sickness) and both meet our definition at the same time we ll only cover the plan premiums once. Connected claims A connected claim happens if we start to pay a claim, and the person covered no longer meets our definition of incapacitated but then within the next 52 weeks meets our definition of incapacitated once again. We ll treat your further claim as connected as long as: the person covered didn t go back to work again against their doctor s advice the person covered meets our definition of incapacitated from the same cause as the original claim; and the person covered is in the same occupation when the further claim starts A connected claim doesn t have a deferred period, so we ll start to pay the claim again straightaway. How your cover payment period affects a connected claim If the additional features of your cover summary shows you have a cover payment period, we ll only pay a connected claim for the remainder of this period if the person covered returns to work before this period ends. This remainder is the difference between your cover payment period and how long in months we paid your claim before the person covered went back to work. For example, if your cover payment period is 24 months and we ve paid your claim for eight months, we ll pay for another 16 months if the person covered has to stop work again and they meet our definition of incapacitated. Page 8 of 56
If the person covered goes back to work after the end of the cover payment period, we won t pay any further claim for any cause until the person covered has been back at work for at least 52 continuous weeks. Claims for unemployment This applies if you have Unemployment Cover or Waiver of Premium (Unemployment). When we ll pay We ll pay a claim if the person covered is made unemployed through no fault of their own, or they have to give up work to become a carer for a relative full-time. You ll find the definition of unemployed in section 5. We ll start to pay the person covered monthly in arrears from either: the date the person covered registers that they're unemployed with the appropriate Government office in the UK, Channel Islands or Isle of Man and they start to receive any benefits, or the end date of when the person covered has served their notice, or when the person covered s pay in lieu of notice stops whichever is latest. We ll continue paying until: the cover payment period ends, if one's shown in the additional features of your cover summary the cover ends the person covered goes back to work the person covered no longer meets the definition of unemployed; or the person covered dies. We won t pay if: the person covered knew when they took out the cover, or could reasonably be expected to have known, that they were going to be made redundant, or that they were going to become a carer for a relative full-time the person covered lost their job because of misconduct, including taking part in industrial action, failing to meet their employer s standards or anything else that made their employer take disciplinary action against them the person covered chose to become unemployed or be made redundant, resigning for whatever reason, retiring, leaving their employment voluntarily or accepting early retirement in lieu of unemployment, unless they did so to become a carer for a relative full-time the person covered becomes unemployed, or is notified that they ll become unemployed at a later date, within eight weeks of the cover starting or the date we assume risk on the plan whichever is later part of the claim is for increased cover, when we accepted that increase less than eight weeks ago, or it s been in force for less than eight weeks the person covered wasn t continuously employed or self-employed for at least six consecutive months when the cover started the person covered s work when they claim is temporary, seasonal, casual (including for an employment agency) or regularly involves unemployment. Page 9 of 56
Switching cover from another insurer If the Unemployment Cover you ve taken out with us is replacing Unemployment Cover with another insurer, we ll waive the eight week period mentioned above under We won t pay if, subject to some conditions set out below. However, the amount of cover we ll pay if you make a claim during the eight week period will be the lower of: the amount you were covered for with your previous insurer, or the amount covered by this plan, or the maximum monthly amount we could pay you. This amount will then be paid for the remainder of your unemployment claim. If you re made unemployed after the end of the eight week period, then the most we ll pay you is as explained on page 14. We ll only waive the eight week period if: the previous cover you re replacing was for unemployment cover, and it was held by you for at least 90 days before you cancelled it. We won t be able to waive the eight week period where your previous plan was cancelled by your previous insurer, or it was solely for credit card protection. If you need to make a claim during the eight week period, we ll ask you to give us: the policy documents for your previous plan, or your permission in writing for us to contact your previous insurer. We ll do this if you can t give us your policy documents, or if the documents don t have the information we need. If you don t give us your written permission to speak with your previous insurer, we ll be unable to waive the eight week period. Connected claims A connected claim happens if we start to pay a claim, and the person covered then goes back to work but has to stop work again within the next three months. We ll treat your further claim as connected as long as: the person covered meets our definition of unemployed. A connected claim doesn t have a deferred period, so we ll start to pay the claim again straightaway. How your cover payment period affects a connected claim If the additional features of your cover summary show you have a cover payment period, we ll only pay a connected claim for the remainder of this period if the person covered goes back to work before this period ends. If we stop paying Unemployment Cover or Waiver of Premium (Unemployment), then the person covered becomes unemployed again within three months, we ll pay for the remainder of the cover payment period. The remainder is the difference between your cover payment period and how long in months we paid your claim before the person covered went back to work. For example, if your cover payment period is 24 months and we ve paid your claim for eight months, we ll pay for another 16 months if the person covered meets our definition of unemployed. Page 10 of 56
Claims for death and terminal illness This applies if you have Life Cover or Life or Critical Illness Cover. We ll pay a claim if the person covered dies or is diagnosed with a terminal illness that meets our definition. You ll find the definition of terminal illness in section 5. We won t pay a claim for death if it s the result of intentional self-inflicted injury within 12 months of the cover starting or restarting. Claims for critical illness This applies if you have Critical Illness Cover or Life or Critical Illness Cover. We ll pay a claim if the person covered (or if there are two people covered, either of them) is diagnosed with a critical illness or total permanent disability if total permanent disability is shown on your cover summary that meets our definition. You ll find the definitions of critical illness and total permanent disability in section 5. We ll pay out once and then the cover will stop. We won t pay a claim under Critical Illness Cover if the person covered dies within 10 days of meeting one of the critical illness or total permanent disability definitions. Claims for Additional Conditions Cover This applies if you have Critical Illness Cover or Life or Critical Illness Cover. We ll pay a claim for Additional Conditions Cover if the person covered is diagnosed with an additional condition that meets our definition. If we pay this claim this won t affect the amount of your Critical Illness Cover or Life or Critical Illness Cover. You ll find the definition of additional conditions in section 5. We ll pay out once for each additional condition. If there is more than one person covered we ll pay out once for each of them. We won t pay a claim for an Additional Conditions Cover if the person covered dies within 10 days of meeting one of the additional conditions definitions. You ll find the additional conditions definitions in section 5. If the person covered meets a critical illness definition in section 5, we won t accept a claim under Additional Conditions Cover. Claims for Children s Critical Illness Cover This applies if you have Critical Illness Cover or Life or Critical Illness Cover. We ll pay a claim if a child of the person covered (or if there are two people covered a child of either of them) meets a definition of a critical illness or total permanent disability. You ll find the definitions of critical illness and total permanent disability in section 5. If we pay this claim it won t affect the amount of the Critical Illness Cover or Life or Critical Illness Cover. We won t pay if: You were aware of an increased risk of the child suffering the critical illness before the start date of the plan, or before the latest restart (for example if the parents had received counselling or medical advice in relation to the critical illness before the plan started); Page 11 of 56
symptoms relating to the critical illness had arisen before the start date of the plan or before the latest restart; the child was born before the cover started and had already suffered a children s critical illness unless: treatment for the condition has been completed; and the child has been discharged from follow-up for the condition; and the child has not consulted any medical practitioner or received further treatment or advice for the condition within the last 5 years; the child dies within 10 days of meeting the critical illness definition or total permanent disability definition in section 5; the child is over the age of 21 years when the claim event occurs; the child doesn t meet the definition of critical illness or total permanent disability; or it s the result of intentional self-inflicted injury defined in section 5. Additional Conditions Cover is not included in Children s Critical Illness Cover. If your Critical Illness Cover or Life or Critical Illness Cover is cancelled or comes to an end, Children s Critical Illness Cover will no longer apply. How much we ll pay Your cover summary shows how much we ll pay for a claim for each cover. All regular payments are made in arrears. We work out the amount of cover from the date the claim becomes payable. We won t take into account any change to the amount of cover after this date. Income Protection If cover is payable as level regular payments We ll pay 1/12th of the lower of: the amount of cover shown on your cover summary, or the pre-incapacity earnings of the person covered multiplied by 55% (the maximum percentage of pre-incapacity earnings shown in the additional features of your cover summary). If cover is payable as increasing regular payments We ll pay 1/12th of the lower of: the amount of cover shown on your cover summary or the amount we ve written to tell you following an increase, whichever is greater, or the pre-incapacity earnings of the person covered multiplied by 55% (the maximum percentage of pre-incapacity earnings shown in the additional features of your cover summary). This amount of cover will continue to increase each year on the date the plan started. The additional features in your cover summary will show whether your cover will increase by a fixed rate or by the retail price index. The cover will increase each year and will continue to increase yearly, as long as the maximum cover amount of 250,000 has not Page 12 of 56
been reached. If the maximum is reached, we won t allow any more increases to the cover amount. If you selected the maximum cover amount of 250,000 when your plan started, your plan will increase on the first anniversary of the plan starting only. If 55% of the person covered s pre-incapacity earnings is lower than the cover amount or the amount it has increased to if you have increasing cover, we ll pay the lower of: 55% of the pre-incapacity earnings subject to a minimum of 1500; or the amount shown on the cover summary or the amount it has increased to if you have increasing cover. If the person covered isn t in work when you claim If the person covered isn t in work when you claim, we won t pay more than 1500 each month. If the person covered has other income We ll reduce the amount we pay so that the total income you receive equals the lower of 1500 or the cover amount you ve chosen if: you have any other plan with us or with any other company which provides what we judge to be similar covers, or the person covered continues to receive earnings from any other form of employment or self-employment while they meet the definition of incapacitated in section 5, and the income from this plan together with the income from those other sources would exceed 55% of pre-incapacity earnings. Similar covers include ones that, if the person covered meets the definition of incapacitated, replace all or part of their pre-incapacity earnings. How much we ll pay if the person covered goes back to their own occupation part-time If we ve been paying a claim, and the person covered goes back to work in their own occupation part-time, with reduced earnings as a direct result of their illness or injury, we ll pay a reduced amount. Here s how we work this out: (pre-incapacity earnings reduced earnings) x normal cover pre-incapacity earnings In this formula, normal cover means the amount we d pay if the person covered continues to meet the definition of incapacitated and isn t working. Where the reduced earnings vary, the amount we ll pay will also vary. We ll need evidence of the reduced earnings. We ll pay this reduced amount provided that the person covered: goes back to work for less than 30 hours a week, and worked more than 30 hours a week before their incapacity, and has earnings from part-time work which are less than their earnings when they met the definition of incapacitated. We ll continue to pay a reduced amount based on this formula until: the person covered goes back to working their full contractual hours (full-time work) Page 13 of 56
the earnings from their part-time work are more than their pre-incapacity earnings the cover payment period ends if one s shown in the additional features on your cover summary the cover ends, or the person covered dies. How much we ll pay if the person covered goes back to work in a different occupation If the person covered meets the definition of incapacitated but goes back to work in a different occupation with lower earnings, we ll pay a reduced amount. We work this out using the same formula and conditions as the part-time section opposite. We ll keep paying this amount until: the person covered no longer meets the definition of incapacitated the person covered s earnings from the different occupation are more than their pre-incapacity earnings the cover payment period ends if one s shown in the additional features of your cover summary the cover ends, or the person covered dies. We work out the amount of cover on the date the person covered met the definition of incapacitated. We won t take into account any change to the amount of cover after this, apart from changes covered in the previous page. Unemployment Cover We ll pay the amount of cover shown on your cover summary, monthly in arrears. Cover is payable as level regular payments We ll pay 1/12th of the lower of: the amount of cover shown on your cover summary, or the person covered s pre-unemployment earnings multiplied by 55% (the maximum percentage of pre-unemployment earnings shown in the additional features of your cover summary). If cover is payable as increasing regular payments We ll pay 1/12th of the lower of: the amount of cover shown on your cover summary or the amount we ve written to tell you following an increase, whichever is greater, or the person covered s pre-unemployment earnings multiplied by 55% (the maximum percentage of pre-unemployment earnings shown in the additional features of your cover summary). This amount of cover will continue to increase each year on the date the plan started. The additional features in your cover summary will show whether your cover will increase by a fixed rate or by the retail price index. The cover will increase each year and will continue to increase yearly, as long as the maximum cover amount of 36,000 has not been reached. If the maximum is reached, we won t allow any more increases to the cover amount. If you selected the maximum cover amount of 36,000 when your plan started, your plan will increase on the first anniversary of the plan starting only. Page 14 of 56
Life Cover, Critical Illness Cover and Life or Critical Illness Cover If cover is payable as a level lump sum or level regular payments We ll pay the amount of cover shown on your cover summary. For level regular payments, we ll pay this in equal monthly payments until your cover ends. If cover is payable as an increasing lump sum or increasing regular payments We ll pay: the amount shown on your cover summary, or the amount we ve written to tell you following an increase, if that s greater. This amount of cover will continue to increase each year on the date the plan started. The additional features in your cover summary will show whether your cover will increase by a fixed rate or by the retail price index. If cover is payable as a decreasing lump sum, and the additional features show that the mortgage repayment guarantee applies We ll pay a lump sum equal to the amount outstanding under the loan or mortgage at the date the claim becomes payable, less any arrears of capital and interest, if: you took out this cover in connection with a capital and interest loan or mortgage the term of the loan or mortgage is the same as the term of the cover when the cover started the amount of the loan or mortgage was the same as the amount of cover shown on your cover summary when the cover started, and you change the amount or term of the loan or mortgage and you also change the amount of cover and/or the term of the cover by the same amount. You ll be liable for any arrears, as they re not covered under this plan. If: any of the above don t apply to you, or the loan or mortgage repayments have been suspended for a while, reduced or increased, other than because of an interest rate change, or you ve repaid the loan or mortgage already when you claim we ll pay you a decreasing lump sum. This decreasing lump sum will be equal to the amount that would have been outstanding on a capital and interest loan or mortgage if this loan or mortgage: was equal to the amount of cover when the cover started had a term equal to the term of the cover had a yearly interest rate equal to 6%, and had equal monthly repayments made between the date the cover started and the date the claim becomes payable As a result, the amount of cover will decrease each month. The amount of cover may not be enough to pay off the loan or mortgage if the interest rate of the loan or mortgage has changed. If cover is payable as a decreasing lump sum, and the additional features in the cover summary show that a mortgage interest rate applies Page 15 of 56
We ll pay the amount that would have been outstanding on a loan or mortgage if this loan or mortgage: was equal to the amount of cover on the date cover started had a term equal to the term of the cover had a yearly interest rate equal to that shown in the additional features on the cover summary, and had equal monthly repayments made between the date the cover started and the date the claim becomes payable As a result, the amount of cover will decrease each month. The amount of cover may not be enough to pay off the loan or mortgage if the interest rate of the loan or mortgage has changed. Getting a lump sum instead of regular payments If your cover is payable as regular payments, you or your personal representatives can ask us to pay a commuted value instead. A commuted value is the amount we'll pay you as a lump sum straightaway instead of making regular payments. We ll consider your request when you make a claim or while we re paying a claim. We ll work out the commuted value by first of all multiplying the regular monthly payment by the number of months left until your cover ends. We ll then reduce this amount fairly and reasonably to reflect the fact that you ll be getting all the regular payments early. If you ask us to work out a commuted value, we ll tell you how much this reduction would be. The commuted value will be less than the total amount of the regular payments. Additional Conditions Cover You have this cover automatically if you have either of these main covers: Critical Illness Cover Life or Critical Illness Cover We ll pay whichever of the following amounts is lower: if the main cover is payable as a lump sum, 25% of the amount of cover at the date we accept the Additional Conditions Cover claim; or if the main cover is payable as regular payments, 25% of the amount of cover at the date we accept the Additional Conditions Cover claim, multiplied by the remaining full years of the term of the cover; or 25,000. We ll pay Additional Conditions Cover as a lump sum. The additional conditions definitions are in section 5. If your plan includes more than one main cover, the limits above apply to the total amount of all these covers. We ll make only one payment for each person covered for each additional condition. The limits above apply to all plans you have with us that include similar Additional Conditions Cover. We ll work out the amount of cover as at the date the claim becomes payable. This means that if your main cover is payable as a decreasing lump sum, the amount of Additional Conditions Cover will be based on the amount your main cover has decreased to at the date the claim becomes payable. Any change to the amount of cover after this time won t be taken into account. Page 16 of 56
If we pay an Additional Conditions Cover claim, we won t pay any further claim for that condition in respect of that person covered, but you may still make a claim in relation to that person covered for any of the other additional conditions. Children s Critical Illness Cover You have this cover automatically if you have either of these main covers: Critical Illness Cover Life or Critical Illness Cover We ll pay the lower of: if the main cover is payable as a lump sum, 50% of the amount of cover at the date we accept the Children s Critical Illness Cover claim; or if the main cover is payable as regular payments, 50% of the amount of cover at the date we accept the Children s Critical Illness Cover claim, multiplied by the remaining full years of the term of the cover; or 25,000. If your plan includes more than one main cover, or you have more than one plan with us covering the same person, and these main covers or plans provide similar Children s Critical Illness Cover, the limits on this page apply to all your main covers and plans. We ll make only one payment for any child. If your plan includes more than one main cover for different people, or you have more than one plan with us for different people, and these provide similar Children s Critical Illness Cover, the limits above apply to all your main covers and plans. We ll make only one payment for any child in respect of each person covered. We ll work out the amount of cover at the date we pay the claim. This means that if your main cover is payable as a decreasing lump sum, we ll base the amount of Children s Critical Illness Cover on the cover you have on the date we pay your claim. We won t take into account any change to the amount of cover after this. Waiver of Premium Waiver of Premium (Sickness) We ll pay your plan premiums for you if the person covered meets our definition of incapacitated defined in section 5 for longer than the deferred period, during the term of the cover. If there s more than one person covered and both people covered meet our definition of incapacitated at the same time, we ll only cover the premium once. We ll continue paying until: the person covered no longer meets our definition of incapacitated; the person covered goes back to work; the cover ends; or the person covered dies. We may ask the person covered to be examined by a doctor or health specialist of our choice. We may ask for any other evidence we reasonably need to consider the claim, or to confirm that the person covered still meets the definition of incapacitated. Page 17 of 56
Waiver of Premium (Unemployment) We ll pay your plan premiums for you if the person covered meets our definition of unemployed defined in section 5 during the term of your cover. We ll continuing paying until the person covered: no longer meets our definition of unemployed; the cover ends; goes back to work; or dies. Page 18 of 56
3. YOUR PREMIUMS More about premium types and frequency It s really important that you keep up to date with paying your premiums. Otherwise, we may have to cancel your plan. When your premiums are due Your first premium is due on the date your plan starts. We ll collect it on this date or shortly after, by direct debit. Your last premium is due on the date shown on your cover summary. If you re paying monthly You must pay a premium every month from your first premium to your last. Your premiums are usually due on the same day of the month that your plan started. If you d rather we collected your premiums on a different day of the month, please ask us. If you re paying yearly You must pay a premium every year from your first premium to your last. Your premiums are usually due on the same day of the year that your plan started. If you d rather we collected your premiums on a different day in the same month, please ask us. What happens if you don t pay a premium If you don t pay your first premium, your plan won t start so you won t be covered. If any other premium is five weeks overdue, we ll cancel your plan so you won t be covered anymore. We ll write to you to tell you that we ve cancelled your plan. What to do if we cancel your plan If we cancel your plan because you didn t pay a premium, you can ask us to restart it. Please get in touch and we ll tell you what we need before we can restart your plan. However, there may be times when we can t restart your plan. If this happens, we ll explain our decision to you. When and how your premiums could change Guaranteed premiums If your cover is level lump sum, decreasing lump sum, or level regular payments As long as you pay your premiums on time, your premiums won t change. This is true for as long as your cover lasts. If your cover is increasing lump sum or increasing regular payments Your premium will increase once a year, on the anniversary of your plan starting. The increase will be based on: how much your cover is increasing by the age of the person covered when the increase starts how long your cover has to go the premium rates we used when your cover started any additional premium you pay if we didn t accept your plan on standard terms We ll tell you how much the increase will be at least a month before it takes place. Page 19 of 56
Reviewable premiums Critical Illness Cover and Life or Critical Illness Cover If you choose this option, your premiums will stay the same for five years. After this time, we ll review them every five years. They could go up or down after each review, depending on a number of factors. When we first work out how much your premiums should be, we ll look at different factors such as: the future level of claims we expect to pay the amount of money we ll pay to reinsurance companies with whom we share the costs of claims the number of plan owners who give up their plans early our expenses inflation investment returns taxes the amount of money we need to hold as financial reserves When we review your premiums, we ll look at these factors again. If their combined effect has been positive for us, we might be able to make your premiums cheaper. If not, your premiums may stay the same or increase. If we change your premiums, we ll do this on the anniversary of your plan starting. We ll tell you at least a month in advance if this is going to happen. Unemployment Cover and Waiver of Premium (Unemployment) The factors used to review your premiums are the same as explained opposite. Your premium won t change during the first year. We ll then review premiums for Unemployment Cover and Waiver of Premium (Unemployment) every year and your premium could go up or down depending on the factors set out opposite. Your Unemployment Cover and Waiver of Premium (Unemployment) premiums will include insurance premium tax (IPT). The UK government can change the rate of tax at any time. We ll change your premium to take into account any change in this tax. If you have reviewable premiums, they could change significantly. Your new premium will always be a fair reflection of all the different factors we ve looked at. There s no limit to what the change might be, so it may be much more than your original premium. Of course, when we tell you how much your new premium will be, you re free to cancel or reduce your cover if you want to. You can ask us to do this using the contact details on page 4. Page 20 of 56
4. CHANGING YOUR PLAN Increasing cover This only applies to any cover that s payable as an increasing lump sum or increasing regular payments. This amount of cover will continue to increase each year on the date the plan started. The additional features in your cover summary will show whether your cover will increase by a fixed rate or by the retail price index. If the date cover started is not the same day in the year as the date the plan started, the first increase will take place on the first anniversary of the date the plan started after this cover has been in force for 12 months. We ll write to you at least a month before the increase takes place to tell you how much the increase will be and how much your new payment will be. If you don t want the amount of your cover to increase, you must tell us at least five days before the increase is due to take place and we ll cancel the increase. If we cancel two consecutive increases we won t offer you any further increases. If, as a result of an increase, the total amount of cover on all plans you have with us would be more than the maximum amounts shown below, your cover won t increase. We ll tell you if this happens. Maximum amounts Income Protection 250,000 a year Unemployment Cover 36,000 a year Critical Illness Cover 3,000,000 Life or Critical Illness Cover 3,000,000 When working out your total amount of cover we include: all cover you have in this plan and any other plan you have with us the current amount of any cover payable as a decreasing lump sum the commuted value of any cover payable as regular payments. How we calculate a commuted value is explained in section 2. Cover Increase Options Your plan comes with Cover Increase Options. This means you can increase your cover in certain circumstances, without giving us any medical information. How it works The following covers come with cover increase options if we gave you standard terms: Income Protection Unemployment Cover Life Cover Critical Illness Cover Life or Critical Illness Cover You can increase your cover, without giving us any medical information, if the person covered: gets married or divorced, or enters into or dissolves a civil partnership increases their mortgage has or adopts a child gets an increase in salary. Page 21 of 56
All we need to see is some evidence of the event: the certificate for the marriage, civil partnership, birth or adoption, or a copy of your mortgage loan offer, or a letter from your employer confirming an increase in salary. You need to ask us to increase your cover within six months of the event happening. And the person covered must be under 55 at the time if there are two people covered, both of them must be under 55. We ll work out a new premium for your cover, and you can decide whether you want to go ahead with the increase. Limits on increasing your cover You can increase your cover more than once. The total you can increase your cover by is the lowest of: half your original cover amount; 200,000 for cover payable as a lump sum; or 10,000 a year for cover payable as a regular payments. If you have more than one type of cover or more than one plan on the life of the same person covered with us, the limits apply to all of them added together not separately to each of them. Income Protection and Unemployment Cover come with some extra limits, so that the total increase is no more than the lower of: the maximum percentage of pre-incapacity earnings we originally agreed to cover our maximum cover amount for each of these on page 20 Your new cover will have the same additional features as your original cover. And it will be on the terms and conditions we offer at the time of the increase. It must last at least as long as our minimum term at that time, but no longer than the time remaining on your original cover. So if the time remaining on your original cover is less than our minimum term, you can t increase your cover in this way. Your premiums will be based on: the terms we applied to your original plan or, at the time of any restart our pricing when we increase your cover the person covered's age when we increase your cover We can t offer you Cover Increase Options if: we accepted your plan on non-standard terms for instance, if we had to charge you a higher premium, or if we had to apply some exclusions we re paying a claim, considering a claim, or if a medical practitioner has given the person covered a diagnosis or possible diagnosis that would allow you to claim If you claimed under our definition of incapacitated, you can t use Cover Increase Options within 12 months of us stopping your payments you re not resident in the UK, Jersey, Guernsey or Isle of Man You won t be able to increase any of the covers if the person covered's already suffering from an illness or condition covered by the plan for which you have or have not yet submitted a claim. Page 22 of 56
Renewable option This option is only available if you have chosen Life Cover Life or Critical Illness Cover Critical Illness Cover and your cover summary shows that the term of these covers is renewable. You have an option to choose a renew period of five or 10 years depending on the term you chose when your covered started. How it works You ll still have an end date for your plan, but just before the end date we ll ask you if you want to renew your cover. We ll ask you to confirm that you want to renew your cover at least a month before your original cover ends. All you have to do is tell us at least five days before your cover ends that you want to use this renewable option. The person covered doesn't need to answer any medical questions. If you don t tell us that you want to take out new cover using the option then at the cover end date your original cover will end and you won t be able to claim after that date. If the age of the person covered at the end of the term would be more than the maximum we allow at that time, the new cover will have a term equal to the whole number of years between the cover end date and the date the person covered reaches the maximum age. If this term is less than our minimum term, you can t use this option and your cover will end on the date shown on your cover summary. Your premiums will be based on: the terms we applied to your original plan or, at the time of any restart our pricing when you applied for your original cover; and the person covered s age when the new cover starts. Your new cover will have the same additional features as your original cover. And it will be on the terms and conditions we offer at that time. Joint Life Separation splitting your plan You can use this option if you and your partner have taken out your plan on a jointlife basis to cover your mortgage and you and your partner are the people covered. You can change your plan into two separate single life plans if you separate and as a result: you rearrange your mortgage to be in the name of you or your partner only; or either of you takes out a new mortgage on a new house. Your new single life plan The covers in your new single life plan will be the same you had under your old plan. So, if you had Life or Critical Illness Cover, your new plan will have that too. We ll base your new premium on: the terms we applied to your original plan or, at the time of any restart our pricing at the time you took out your original cover the person covered's age at the time you took out your original plan. Your new plan will have: the terms we applied to your original plan or, at the time of any restart Page 23 of 56
the same additional features, extra premiums or exclusions as your original plan, and a cover amount that s no greater than the amount you had when you asked us to separate your plan. It must last at least as long as our minimum term, but no longer than the time remaining on your original cover. So, if the time remaining on your original cover is less than our minimum term, we can t separate your plan. Setting up your new plans Both you and your partner must agree to separate your plan in this way. We ll need confirmation that your mortgage has been rearranged either written confirmation from the lender, or a copy of the new loan offer. Each of your plans must begin within six months of rearranging your mortgage or taking a new one out, whichever you choose to do. Joint Life Reinstatement This only applies: to a cover when more than one person is covered; and we ve paid a claim for Life Cover, or for Critical Illness Cover, or for Life or Critical Illness Cover (the original cover). In this situation, you may take out a new cover which is the same type as the original cover. Reinstating your cover This new cover will only be for the person covered on the original cover who wasn t the cause of the claim. They ll have to agree to this new cover being taken out. We ll base your new premium on: the terms we applied to your original cover or, at the time of any restart our pricing when you applied for your original cover, and the person covered's current age when you take up the option. Your cover will have: the same terms and conditions we applied to your original cover the same additional features, extra premiums or exclusions as the original cover, and a cover amount that s no greater than the cover you had when we paid the claim. Your reinstated cover must last at least as long as our minimum term, but no longer than the time remaining on your original cover. So, if the time remaining on your original cover is less than our minimum term, we can t reinstate your cover. You can only reinstate your cover once. Lifestyle review If we accepted one of your covers on non-standard terms or charged smoker rates, and the person covered changes their lifestyle in a way that you think reduces the likelihood of a claim, you can ask us to review the terms for that cover. For example, perhaps the person covered was a smoker when the plan started but has now given up. If we can, we ll change the terms to reflect the person covered's new lifestyle. This may mean we could reduce your premium or remove an exclusion. If we can t change the terms, we ll explain why. Page 24 of 56